Until now, the smartwatch market had seen year-over-year growth each quarter since the devices made their debut. For Q2 2016 though, that wasn't the case. Global smartwatch shipments were down 32 percent, totaling 3.5 million gadgets during the period. That figure is down from 5.1 million of the wearables shipped during the second quarter of 2015. Apple still led the pack with 1.6 million units, but it was the only top-selling company to experience an annual decline. It's worth noting that Q2 2015 was when the Apple Watch launched and there hasn't been an updated model yet.
Speaking of new devices, the lack of updated hardware is a key reason the for the drop in numbers. Improvements to Apple's watchOS were announced back at WWDC, but they won't arrive until this fall. There's a new version of Android Wear on the way as well. Combine that with no new model from the top company and buyers are waiting to nab a wearable if they haven't done so already. As IDC points out, Apple's share of the market is nearly half (47 percent), so when it sees a decline that shift significantly impacts the entire segment of devices.
IDC also notes that only a select few traditional watchmakers have delivered a more modern spin on the timepiece. The likes of Casio, Fossil and Tag Heuer have done so, but the analytics company expects the smartwatch market stands to benefit if more of those companies join the tech OEMs that are cranking out the devices at a solid pace. A little brand recognition goes a long way.
That 32 percent figure may also seem like a significant drop, but that has to be considered alongside the overall size of the smartwatch market. 3.5 million total units shipped in a quarter for all vendors is still quite small when compared to other gadgets like phones. Sure, smartwatches have yet to take hold like handsets have, but the comparison shows that those wearables continue to be a niche item. In terms of other top-5 companies, Samsung still ranks number 2 behind Apple thanks to the Gear S2 and its ability to function without being tethered to a phone. Lenovo sits in third after nabbing Motorola as the Moto 360 continues to be a top choice for Android Wear fans who prefer a circular display.